JAKARTA -- Indonesia's trade figures for the first four months of this year show manufacturing companies were absorbing more imported raw materials and capital goods to support their growing production volume.
Imports of raw materials in the January-April period reached US$30.17 billion, up by 64.36 percent from US$18.36 billion in the same period last year. Meanwhile, capital goods imports hit US$8.2 billion, a 46.67 percent increase from US$5.6 billion over the first four months of last year.
Based on these figures, imports of raw materials reached 72.7 percent of Indonesia's total imports in the first four months, coupled with capital goods that contributed 19.8 percent and 7.5 percent of consumer goods.
Indonesia's non-oil and gas imports surged by 60.83 percent to US$41.5 billion in the first four months of the year from US$25.8 billion in the same period of 2009 on the back of an increase in realized investments, said Deputy Trade Minister Mahendra Siregar.
“The higher imports especially of raw materials and capital goods conform to the growing realization of investments,” he told reporters last week.
Mahendra said the drastic increase of non-oil and gas imports was not a concern because most were used by domestic manufacturers to increase production, and would later trigger higher exports, stronger economic growth and job creation.
Chatib Basri, an economist at the University of Indonesia, said the jump in imports would lead to an expansion of investment.
“I'm always happy with the growing imports since 92 percent of our imports consist of raw materials and capital goods,” he told The Jakarta Post.
He said the growing imports of raw materials, as a consequence of strong exports of manufactured products, would gradually increase imports of capital goods leading to production capacity expansions.
Apart from imports, Indonesia's exports and overall trade balance also showed strong performances during the last quarter of 2009 to the first quarter of 2010 and also in April.
According to the Trade Ministry, Indonesia's trade volume reached US$23.6 billion in April with a surplus worth US$527.5 million, bringing the January-April trade surplus to US$6.1 billion, which is a 7.2 percent increase compared to the same period in 2009.
Mahendra said Indonesia's surplus could be broken down into a non-oil and gas surplus worth US$6.2 billion and an oil and gas deficit worth US$0.1 billion.